Preko, R v

On 9^th December 2013 in the Crown Court at Southwark the appellant Ellias Preko (55) was convicted after a re-trial of two counts of money laundering (Counts 1 & 2 of the indictment at re-trial). He had been acquitted of Counts 1, 4 & 5 of the original indictment and that jury was unable to reach a verdict in respect of Counts 2 & 3, re-numbered Counts 1 & 2 at the re-trial. He was sentenced to 4 ½ years’ imprisonment on each concurrently. He appeals against convictionby limited leave of Openshaw J.

James Ibori was the Governor of Delta State in Nigeria from 1999 to 2007 during which time he defrauded the state of $89 million. He intended to secrete the proceeds of his political corruption in offshore accounts and trust funds. The Crown’s case was that Ibori sought and obtained the appellant’s assistance in placing over $5 million of that sum in foreign accounts and that the appellant from the outset knew or suspected that Ibori’s funds were criminal in nature.

Count 1 went to the funding of Zircon and Onyx, a trust set up for Ibori’s benefit and whose assets were held by Zeta Limited and Alantar Limited respectively. The funds came from a company called Sagicon, owned by the mother of Ibori’s child. This prompted enquiries by The Royal Bank of Canada (“RBC”), which was to hold the funds as trustee. At a meeting at Guernsey airport in May 2004 RBC agreed to accept the funds, comforted, said the Crown, by the appellant’s persuasiveness and reassurance. Due to the difficulties in persuading RBC to accept the funds, Onyx and a holding company Alantar were established by William Hunter of NMT Trustees, a close associate of the appellant. Funds held in Zeta and Alantar were invested at the appellant’s direction on Ibori’s behalf through stockbrokers Brewin Dolphin.

The appellant arranged through NMT for another company to be established, Manapouri Limited, which owned a Bentley bought by Ibori. Count 2 represented the funding of Onyx and the purchase of the Bentley.

The Crown suggested that Prekowas a well-educated respected investment banker who had worked at Goldman Sachs (“GS”) for 10 years. Without him Ibori could not have laundered the funds. It was common ground that Preko had had comprehensive money laundering training and realised how important it was to know both client and source of money. The Crown suggested he knew Ibori was a politically exposed person (“PEP”) and concealed this. After he left GS, he sought cover under a small investment company, DECA, but was not candid with them, concealing clients.

Preko’s case was that on the instructions of Ibori he helped set up trust funds and managed investments they held. He neither knew nor suspected the money was proceeds of crime. He believed an account for Ibori had been opened at GS, and no one said otherwise. Other institutions had accepted Ibori’s funds, despite their own extensive, independent due diligence.

He relied on his record with GS where between 1991 and 2001 he was paid over $10 million in salary and commission. When made redundant his severance package was $3 million.

Ibori was introduced to him in 1996 or 1997 by Pat Ward and Joseph Sassoon his managers at GS. Everyone at GS knew Ibori was a PEP.

At GS Kevin Fordran money-laundering programmes and training and was responsible for due diligence. Any politician from Nigeria was automatically a PEP and attracted a higher standard of due diligence due to the corruption there. Preko, he told the jury, would have been well aware of this and obliged to note on the relevant form that Ibori was a politician. He did not. Mr Ford recommended that no account be opened because of the Nigerian political connection. In a face-to-face meeting with Preko he explained that disturbing information had surfaced. Preko wanted to appeal the decision, and was told several times that no account was to be opened. Ibori was never a GS client.

David Wilsona senior lawyer at GS confirmed that no account was opened. An account number is issued when an account is opened, regardless of whether money were deposited.

RBC had misgivings about Ibori, which Preko tried to answer. It operated on the basis that an account had been opened at GS though it could not say for certain whether that were so.

Giuseppe Dessi had worked at GS for 13 years and knew Preko. Dessi set up DECA which held a FSA licence to handle other people’s money. Preko joined DECA in October 2002, needing its licence to work in the UK. According to Dessi and Magoni. DECA’s compliance officer, Preko’s clients were not registered with DECA, and only if they had been would due diligence have been done. Preko, said Dessi, was not salaried and brought no clients. Dessi had never heard of Zeta or been asked to do any checks on them or met Ibori. Preko was not authorised to perform checks on clients. An IMA involving stockbrokers Brewin Dolphin (before the jury) was a forgery. They were not a DECA client and had they been Dessi would have done due diligence. Mr Mergoni confirmed much of Dessi’s evidence. Preko had no power to sign the IMA and Mergoni never saw a file for Ibori, Zeta or Alantar.

Preko told the juryhe was a 54 year old Ghanaian and on the board of several multinationals. He joined GS in 1991 and at leaving had approximately 40 active clients, many of whom had opened but not funded accounts and this would not secure an account number. He had compliance training about four times a year.

He met Ibori at GS when his manager, Sassoon, introduced him in 1996/1997 Sassoon was keen GS should open an account. GS, whose clients included many PEPs, knew Ibori was Governor of Delta State. Documents would have been seen, and an account was opened in 2000.

Zeta was opened, incorporated by Monument, and Zircon was created. Monument/RBC knew Ibori was a PEP – they referred to him as HE (His Excellency) – so there was no need to record this on the form since everyone knew. Neither Sassoon nor Ford ever said Ibori had been rejected as a client. A list of clients Preko was taking with him did not include Zeta or Ibori because they were not ‘funded’ but had an account opened in principle.

Dessi needed a senior person for FSA licence purposes. Preko brought clients, each with a client file. DECA was only allowed to manage accounts and its due diligence consequently was not at the level of institutions which take client money. He discussed clients and their portfolios with Dessi. Serengeti Asset Management, registered with Dessi as a company, never traded. Preko left DECA in 2006, moved back to Ghana and transferred all his clients there.

An account, unfunded, had been opened at GS for Ibori who wanted to reactivate it. The same business interests were declared as before. Ibori was consistent and Preko had no reason to doubt him. A $4 million transfer to RBC Ibori said was from the sale of securities, though Preko did not see the transfer documents. He had no idea that documents associated with the Sagicon money were false. Due diligence was not his responsibility, he simply bought and sold. He did not know or suspect that Ibori’s money was the proceeds of crime. $4 million was an insignificant sum. He had known Ibori since 1996/1997 and Ibori had bank accounts all over the place. No one seemed to be refusing or suspecting him. His own fees were never paid by Ibori.

Criminally tainted money was always a danger in the world of big finance. Preko dealt with money already cleared so his due diligence marched alongside that of the relevant banks. He denied one-to-one training with Ford. He accepted in general terms that in some areas politicians were known to inflate contracts, but GS had introduced Ibori as a prospective client and released an account for him. That he did not have an account number might have been since it was not funded.

At the start of the re-trial the Crown sought to lead evidence relating to the original Count 1 as essential to the factual background of the current Counts 1 & 2. However, it submitted that since his acquittal could not be taken as proof that, for all other purposes, he was innocent, it was unnecessary to mention the acquittal. The defence objected to the leading of the evidence and, were the court against it, argued that the jury should know of the acquittal.

The Judgeruled that the evidence was permissibly before the jury (as to which there is no complaint) but that the acquittals as a matter of law were irrelevant.

Witnesses from DECA touched on the subject of the original Count 1, the Crown commented on it during its closing speech, and the defence revisited the admissibility of the acquittal. The Judge thought it inevitable the previous counts would be trodden on to a certain extent, as activities were relevant, but that did not make the acquittals admissible.

The Crown sought leave to ask Preko about a document added to the jury bundle as page 70a which it suggested was the written record of the GS compliance department decision to decline the account for Ibori. The defence challenged its provenance and origins as not established.

The Judge said that with thousands of documents the Crown had to anticipate relevance and perform an exercise in reduction. After Preko’s evidence that no document existed to say GS rejected Ibori, 70a was highly relevant to that central issue. Preko had thrown down the gauntlet and could be asked about it.

Ground 1: The acquittals on Counts 1, 4 and 5 should have been admitted in evidence. The appellant had to meet the same allegations in the retrial of which in the first he had been acquitted on three counts out of five. He could not refute the allegations pleaded in Counts 4 and 5 since the Crown did not cross-examine him on them but referred to them in its closing speech. The single judge gave leave on this Ground.

Ground 2: Page 70a should not have been before the jury. Any relevance did not arise ex improviso and it should not have been introduced during cross-examination, especially as it was a document Preko could not explain. The jury should not have been invited to speculate about its purpose and effect. Renewed application is made for leave to argue this ground after refusal by the single judge

Ground 3: The judge should not have said that if Preko had known Ibori’s application for an account had been rejected he was guilty of Counts 1 and 2. This was not based on evidence and it was not the approach of the Crown. The single judge gave leave on this Ground.

Ground 4: Although an adverse inference from the failure to answer questions was not left to the jury the judge summed-up in such a way as to leave the possibility that Preko had in fact failed to mention an explanation on which he later came to rely. The single judge gave leave on this Ground.

Ground 5: The Crown sought to reverse the burden of proof by submitting that Preko should have called witnesses employed by GS and commenting adversely on his failure so to do. The judge gave some support to this approach. The single judge gave leave on this Ground.

Ground 6: The Crown sought to undermine both the appellant and those representing him by commenting that money launderers acquire extensive funds and hire expensive lawyers to protect their interests which meant, in the circumstances, to get them off when arrested. The single judge gave leave on this Ground.

Ground 7: The judge had agreed to give a direction on the consequences of delay and consequential difficulties but failed to do so. The single judge gave leave on this Ground

As to Ground 1, we set the scene with our view that the jurisprudence on the admissibility of previous acquittals is not in issue and, though a number of authorities over the years has sought to enlarge upon the topic, the enduring principle remains well-expressed in R v Joseph Robert H (1990) 90 Cr. App. R. 440. Lord Lane said:

During submissions the judge was taken to authorities to the effect that an acquittal is not conclusive evidence of innocence and does not establish that all relevant issues were resolved in favour of the accused: Terry[2005] QB 996. Evidence of an earlier acquittal is generally irrelevant and therefore inadmissible: Hui Chi-Ming v Reg[1992] 1 AC 34. In most cases it is impossible to be certain why a jury acquitted. An exception may exist where a witness’s credibility is directly in issue and there is a clear inference that the jury rejected his evidence because it did not believe him – see for example Edwards [1991] 2 All ER 226.

Mr Horwell QC reminded us that the original Count 1 alleged entering into an arrangement between 1 February 2000 and 24 March 2003, Preko’s final 21 months at GS during which the meetings with Ford and Sassoon were said to have taken place, and his first six months at DECA. He was tried on money laundering from 2003 -2005 and in each trial it was a fundamental assertion that from 2001 Preko knew Ibori to be corrupt and his money proceeds of crime. Preko accepted at both trials that from February 2000 to March 2004 he had agreed with Ibori to use Zeta to control Ibori’s funds. Consequently, Mr Horwell suggests, his knowledge was the only issue in trial one, count one.

The effect for which he argues is that the second jury, once it heard evidence about that period, was entitled to take the acquittal into account and it would have added weight to Preko’s evidence.

Mr Horwell urged us to keep well in mind that in trial one Preko had been acquitted of Counts 4 and 5, the forgeries (signatures in his own name on DECA IMAs). It was as a consequence of that verdict, he told us, that the Crown undertook in trial two not to suggest that Preko was not authorised to sign DECA IMAs, as it had suggested during trial one.

Dessi and Mergoni were the only witnesses on Counts 4 and 5. Until due diligence showed the money to be clean there was, said Mr Horwell, no question of signing the IMAs - the precise allegations of which Preko had been acquitted.

Dessi and Mergoni in trial two were according to Mr Horwell agitated by not being asked about IMAs and Dessi at times was uncontrollable. Mr Horwell, aware of the Crown’s stance, did not re-examine on their limited references to authority to sign. He told us that naturally he did not lead the matter of the IMAs during Preko’s evidence.

He explained to us his astonishment at a foreshadowing, followed by a volte face and finally by an impermissible reference not rooted in cross-examination. During cross-examination of Preko absent the jury the Crown signalled its intention to apply to ask him about authority to sign IMAs thus, Mr Horwell would say, resurrecting counts 4 and 5 from trial one. He objected and awaited the application foreshadowed. Next day came the volte face when it was withdrawn. Thus, so the submission goes, Preko had neither opportunity nor need to give evidence about it.

Mr Horwell complains, therefore, about that part of the Crown’s closing speech which he submitted resurrected the IMAs.

The Crown said:

By the time of this mention in the Crown’s closing speech, the aspect Mr Horwell describes as impermissible and unfair, Preko is said to have lost his chance to offer the jury his evidence on the topic.

Mr Horwell’s précis of his submissions is that trial two was conducted as though trial one did not happen and that the combination of all that of which he complains is that trial two was unfair.

He sought to support that assertion by reference to what he described as theCrown’s failure to call witnesses central to the background, especially Vikki Willis, compliance officer at GS. Whether Ibori opened an account at GS was in hot dispute. The Crown’s case was that the reasoned refusal – that Ibori was corrupt – Ford had explained to Preko. Preko’s case was that the application had been agreed in principle. Ford conceded that by the use of a particular form the application must, at that stage, at least have been agreed in principle. Preko told the jury that if the application had been refused he had not been told and nor did the trustees know. Mr Horwell told us this contest was as much a part of trial one as of two.

As to Ground 2, Mr Horwell took us to cross-examination of Preko when the Crown sought to introduce page 70a, part of a file produced in 2008 by David Wilson which had not featured in trial one and not previously in trial two.

Page 70a reads:

Mr Horwell objected to its being put to Preko and the Crown said its relevance had only just become clear.

Before us Mr Horwell’s submission was that though on its face it might have gone to determination of the application, without more it lacked relevance. It does not speak for itself. Its purpose is not clear. The author is not identified. There was no suggestion Preko had seen it so he was in no position to comment. It was close to certain it could not have been written by Miss Willis as she used the abbreviation “Vikki” not “Vicky” as on 70a. Ibori’s application had been stamped “Approved VW” whereas the contrary is conveyed on the face of 70a. If it were relevant then it did not arise ex improviso. The issue to which it went was clear at the latest during trial one which ended 18 months before trial two began.

In his ruling permitting the Crown to deploy it the Judge said:

Mr Horwell complains too about the Crown’s reference to it as "Vicky Willis's document" since it had nothing provably to do with her yet the epithet lent it weight because of her position. It had clearly not come from compliance as the ticking of the box “Compliance Notified” showed. The Judge was astute to this during dialogue but by the time he summed up he too referred to “VWs document”.

The Crown argued that Preko’s defence team had long had the document. Indeed interviewed as long ago as September 2008 and shown 70a Preko said Ibori was subject to due diligence at GS and an account had been opened.

Mr Horwell argued and argues that, on the contrary, the Crown set an ambush. If it had elected not to prove its own document it should not be entitled to put it in during cross-examination. The Crown must have known of its relevance to the important issues of whether the application had been rejected and if so whether Preko were told.

Mr Horwell suggests that in cross-examinationthe Crown tried to lay a trap for Preko as, he said, it had always intended. The state of play was long distant from Preko having thrown down the gauntlet, as the Judge had effectively described it.

Hence the importance of the rehearsal, described as deficient, during the summing-up, when the Judge said:

On that basis, Mr Horwell argues, Preko could have been convicted on 70a alone, an anonymous unexplained document.

As to Ground 3, that the judge should not have said that if Preko knew Ibori’s application had been rejected he was guilty of Counts 1 and 2, during cross-examination, Preko had accepted that had he been told by Ford that Ibori’s application had been rejected and, second, that Ibori had been found to be corrupt, then he was guilty of counts 1 and 2.

The Judge, immediately after that part of his summing up we have quoted above, added:

The complaint is that the comment, towards the end of the summing up, far from fairly representing Preko's evidence, omitted the most important part of the question, the element of corruption.

As to Ground 4, adverse inference, the Crown had cross-examined with an eye to an interview in which Preko said “GS did not tell me of the reason the account was declined”. It hoped to rely on his failure to foreshadow his case at trial that an account had been opened, an explanation it hoped to suggest had been later fabricated. However, six months earlier, during an interview which was before the jury Preko had said an Ibori account had been opened and the Crown abandoned its application for an adverse inference.

During the summing up when the Judge considered the cross-examination designed to lay the foundation for the adverse inference, he is said to have resurrected this. He said:

As to Ground 5, reversal of the burden of proof, the submission relies on what Mr Horwell described as a known vulnerability on the part of the Crown due to its failure to call key witnesses. Vicky Willis, Sassoon and Ward he argued were oddly absent. The Crown closed its case on the basis that Preko should have called them and that that failure undermined his case.

In his summing-up the judge said:

At the conclusion of his distillation of Preko’s evidence, some 33 pages of transcript later, the Judge said:

As to Ground 6, expensive lawyers, acomment in the Crown's final speech pejorative about the hiring by those in jeopardy of expensive lawyers Mr Horwell suggests bore the implication that Preko’s lawyers were paid to advance an unmeritorious cause.

Its foundation lay in anexchange about Companies House documents which RBC wanted. A comment was made by Preko to Ibori:

The jurisprudential principle on the admissibility of prior acquittals which we set out was plainly in the mind of the Judge, doubtless astute to its rarity being rooted in a jury not being required to give reasons.

There is a range of explanations for the consistency of the acquittal in trial one and the conviction in the retrial. It is neither helpful nor necessary to attempt exhaustive recitation of all possibilities so we mention only some of the examples the Crown, when pressed, suggested are obvious.

The first jury might have been affected by a conclusion that no money actually came in to GS, and decided to acquit. In trial one Preko’s defence team departed during his cross-examination and the effect upon Preko was, we are told, plain to see. That he was unrepresented for a significant part of the trial and, as the transcript suggests, he and the Judge were not at one might also have played a part in the approach of the jury. The Crown’s case was that at a 2001 meeting Ford told Preko that Ibori was a PEP and corrupt. There were no contemporaneous notes of those events which by the trial were long in the past, and the topic of extensive cross-examination. For all we know the jury rejected Ford’s evidence for that reason if for none other. True it is that the judge in his summing-up in the first trial told the jury it was open to it to conclude that counts 1, 2 and 3 stood or fell together but he also directed it to consider the evidence in respect of each count separately because of the potential for different verdicts, depending on its view of the evidence.

As to the acquittals on counts 4 and 5, the Crown, invited at the retrial to indicate how it would amend its Opening, when it told the court it was content not to open that Preko was not authorised to sign the IMAs nevertheless pointed out that that position might change as the defence case developed.

The DECA witnesses told the jury they had not heard of Zeta or Alantar or Ibori. When it was suggested that the existence of the IMAs suggested that to the contrary these were DECA clients they said Preko was not entitled to sign the IMAs.

In our view this rejoinder emerged against the backdrop of a first trial and in light of a self-denying ordinance by the Crown in the retrial. It was however always open to Preko to tell the jury that DECA did know of these clients and that it must have done due diligence.

The criticised comment in the Crown’s final speech did no more than remind the jury of evidence which went to whether the DECA witnesses knew of Ibori. Its case was that none did, since Preko was protecting him and had signed a document he was not entitled to sign. Once this is remembered it is easier to understand that his acquittal of forgery, a signature in his own name, could not have been of assistance to the second jury on whether he had authority to sign IMAs. The acquittals would not have shown that the first jury disbelieved the DECA witnesses.

Once again, in our view it would achieve nothing to speculate ad infinitum on the range of potential explanations for these acquittals. That one jury in one trial did not find the Crown’s case proved to the criminal standard is of no relevance to the decision of the jury in the retrial.

We are in no doubt that the Judge reached the correct conclusion.

The difficulty confronting Mr Horwell begins with Preko having been asked about this in interview 2008. It is then compounded by the page having been served by the Crown not only long before the retrial began but well in advance of the first trial.

No account number was recorded on page 70a. Ford’s evidence was that after due diligence a supplementary form, although recording information about Ibori's business, was silent as to his PEP status, though the question had been posed. The jury had all those documents.

The Crown thus began its presentation of trial two in this position: The jury had documentation which lacked an account number, suggestive of none being in existence. GS had done due diligence. Ford said he would never have approved Ibori and would have told the person handling the application, viz Preko, of that. David Wilson’s search of the GS database revealed no record of Ibori or of Zeta holding an account.

The suggestion that GS, aware of the unflattering reports on Ibori, would nevertheless have decided to open an account was in our view one of which even Mr Horwell would have struggled to persuade a jury.

We examined the transcript of cross-examination, given the uncompromising nature of Mr Horwell’s submission about the bona fides of the Crown’s approach. It reveals Preko consistently averring that, had there been a rejection of an account, documentation to that effect would exist. Those comments were not extracted from him as a consequence of a line of questioning by the Crown, rather it was Preko who repeated his mantra no matter the question posed.

70a, on its face controverting the repeated assertions Preko chose to advance, was capable of showing that his evidence lacked candour or at the very least accuracy. It was plainly of potential importance as going to an issue he elected to emphasise.

We regard the suggestion that it did not arise ex improviso as taking the matter no further. 70a was part of the documents served by the Crown in support of its case. Preko and his lawyers knew of it by the time of preparation for the first trial.

Whether something may permissibly be put in cross-examination when evidence of the defendant brings out some matter more clearly than the other party might have appreciated can be a grey area. What is far from grey however is the approach to be adopted. The trial judge is best placed to make that assessment, having the whole feel of the case: Grocott [2011] EWCA Crim 1962

Not only are we in no doubt that 70a, capable of controverting his repeated assertions, was permissibly put to Preko once he had chosen his course during his evidence, but we should have found it astonishing had the Crown not made the application.

That it was described as “The Vicky Willis” document was no more than shorthand. That submission adds nothing.

We reject the renewed application on Ground 2.

Whilst it is true that in the criticized comment the Judge did not articulate corruption as a necessary element before the case could be proved, the position for which the Crown argued was uncomplicated and had been clearly expressed. To be sure that Preko knew Ibori’s application had been rejected the jury was bound to have considered the evidence as a whole. It could not have been under any misapprehension: Preko’s awareness of corruption was part and parcel of the knowledge the Crown had to prove. The Judge’s passing comment must been seen in the context of the entirety of the summing-up and of the trial itself, not as standing artificially proud. The jury can have been in no doubt of what was required before it could convict.

We reject this Ground.

There are insuperable difficulties in the way of this submission. First, the Judge was entitled to remind the jury of that part of the cross-examination when he dealt with the entirety of the evidence of Preko. In any event, fatally to the criticism, he directed the jury that it must not draw any adverse inference against him for failing to answer questions in interview.

That is an end to the matter and we reject this Ground.

The authorities suggest that in limited circumstances the Judge may permissibly comment on the failure of the defendant to call a particular witness albeit confined to instances where the Crown would have had no means of knowing the witness had relevant evidence to give until after the commencement of the defence case.

The decision to mention Preko’s failure to call witnesses was one of judgment for the tribunal which had heard the entirety of the evidence and the submissions of experienced leading counsel. Even if we were concerned about the criticisms advanced, this Ground would fall away in light of the clear and unambiguous direction (not criticized) that the Crown throughout bore the burden of proof.

We reject this Ground.

Examination of the transcript did not support Mr Horwell’s contention. These passing remarks were neither controversial, prejudicial nor unfair. Experienced leading counsel have regularly met and will meet again in hotly contested trials comments they would prefer had not been made. That is a long way short of impermissibility, even if (and we do not suggest it was here) it were a “dig” at an opponent.

There is nothing in this Ground.

This too we can take shortly. That there was no such direction is not, on these facts and with the advantages for the jury of skilled presentation in the hands of Mr Horwell, such as to bring the safety of the conviction into doubt. On any view this case was heavily document-dependent and parties were far from reliant upon memory without more.

We reject this Ground.

For the reasons given this appeal is dismissed.